A recent survey1 on social security conducted by Nationwide revealed some eye-opening stats.
Interestingly, of those surveyed, 89% responded they were somewhat confident in their knowledge of social security. However, when tested on the facts, some serious knowledge gaps emerged along with a general theme of uncertainty. Here are some of the survey’s high and (low) lights:
- Only 16% correctly guessed their full retirement age
- The lowest knowledge levels were around taxation, inflation and Medicare
- Only 45% correctly answered that benefits are not tax-free
- Only 6% correctly identified all factors that determine the max benefit one can receive
- Roughly 35% say they are working with a financial professional
- Only about half say their financial professional provides social security advice
- Roughly 65 million Americans will receive monthly benefits totaling over $1 trillion for the year
- About 9 out of 10 people aged 65+ receive social security benefits
- Retired workers account for roughly 74% of the total benefits paid
- The age 65 average life expectancy is now at 20 years
- There are 2.8 workers for each social security beneficiary, by 2035 there will 2.3
The survey results are not surprising and align to our experience working with clients to review and optimize their benefits. Here are some of the most frequent questions we help answer:
- When should I consider taking my benefit?
- When is the earliest I can take my benefit and what is the reduction for taking it early?
- I am divorced, can I collect based on my ex-spouse’s benefit?
- I am widowed, when am I eligible for benefits?
- How do I enroll and begin collecting my benefits?
- Is my benefit taxable and how much is taxable?
- Do capital gains impact my taxable benefit?
- Can I begin collecting and still work?
- How much can I earn if I am working and collecting Social Security?
- What is included in income for determining how much income I can earn while collecting Social Security?
The bottom line: Planning for and selecting a retirement date is the most critical decision you will make in your financial life. In our opinion, maximizing and deciding when to take your social security benefit comes in at a close second. Social security is complicated and can be difficult to navigate on your own. Working with a knowledgeable, trusted financial pro is advisable for maximizing your benefit AND helping you walk you through the enrollment process. Having someone there at each step to address any questions, concerns or bumps in the road is invaluable. If you’re nearing age 60 or considering taking your benefit now, it is worthwhile to seek the help and guidance of a financial pro to provide peace of mind and confidence that you are making informed decisions!
Financial Advice is offered through Mid Atlantic Financial Management, Inc. (MAFM) a Registered Investment Advisor. Tempus Advisory Group is not a registered entity or a subsidiary or control affiliate of MAFM. This information should not be duplicated or distributed unless an express written consent is obtained from Tempus Advisory Group in advance. The views expressed here reflect the views of the Tempus Advisory Group Investment Committee as of 8-9-2021. These views may change as market or other conditions change. This information is not intended to provide investment advice and does not account for individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Past performance does not guarantee future results and no forecast should be considered a guarantee either.